At a time in which Russia prepares to legalize Initial Coin Offerings (ICOs), a company co-owned by Russian President Vladimir Putin’s internet ombudsman Dmitry Marinichev reportedly plans on raising as much as $100 million through an ICO, in order to help Russian entrepreneurs challenge China’s bitcoin mining supremacy.
The company, Russian Miner Coin (RMC) is going to issue tokens in exchange for Bitcoin and Ethereum, so as to use the funds to build mining infrastructure in Russia. RMC token holders will have the rights to 18% of the revenue generated by the company’s mining equipment, according to Bloomberg.
Per Dmitry Marinichev, RMC plans on using semiconductor chips designed in Russia, designed to be used in satellites, to minimize power consumptions in cryptocurrency mining operations. Putin’s internet advisor even added that Russia has the potential to be a dominant player in the cryptocurrency mining industry, stating:
“Russia has the potential to reach up to 30 percent share in global cryptocurrency mining in the future.”
According to Bloomberg, Russia has 20 gigawatts of excess power capacity, which makes consumer electricity prices as low as 1.3 cents (80 kopeks) per kilowatt hour, reportedly less than in China. This surplus would give Russia an edge over China, as one of the biggest costs associated with bitcoin mining is power consumption.
Bitcoin mining is an energy intensive process that generates new tokens and adds new transactions to the blockchain. Currently, miners get a 12.5 BTC (about $54,000) reward for discovering a block. Additionally, the miners are awarded fees users paid in transactions as an incentive.
Various ICOs have recently raised millions of dollars within a few hours, often with more than a good idea and a well-written whitepaper to show. RMC’s ICO might be a way for Russia to instantly secure the $100 million to tackle China’s bitcoin mining supremacy and take over the market – if it hits the desired amount, that is.
Putin’s internet ombudsman’s company is the latest to join this year’s ICO mania. As reported by CCN, in the first half of 2017, ICOs raised over $1.2 billion. Recently, Estonia also announced it could issue its own national digital currency, Estcoin, in the world’s first government ICO.
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